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Budget – 2017

Economic directions :-

Despite global external challenges, Malaysia’s economy is anticipated to grow at 4.5% in 2016. The private sector continues to steer Malaysia’s domestic demand with the bulk of private investment driven by ongoing infrastructure projects. Looking ahead into 2017, Malaysia’s growth is expected to be modest, subject to better growth in world trade, particularly the US, developing economies and emerging markets.

  • Malaysia’s real GDP is expected to register growth of 4% to 5% in 2017, driven by growth in private consumption at 6.3% and investment at 5.8%.
  • Malaysia’s CPI, although contained at 2.0% to 2.5%, may face inflationary pressures with the impact of the lower ringgit on the costs of imported business inputs and consumer goods.
  • Total trade stands at RM1.52 trillion. While exports and imports have been increasing steadily, the trade balance remains in surplus, albeit a lower surplus, with tepid global demand. China and ASEAN countries continue to be Malaysia’s key trading partners.

Growth By Sector :-

The services and manufacturing sectors continue to be the major contributors to Malaysia’s economic growth. In 2017, all sectors are expected to continue their positive growth track. Growth in the construction sector continues to be propelled by the rail infrastructure projects, urban housing and affordable housing segments.

Growth by Sector for last 3 Years

In Percentage

Sectors

2015

2016

2017

Agriculture

1.2

-3.3

1.5

Mining & Quarrying

4.7

1.1

1.4

Manufacturing

4.9

4.0

4.1

Construction

8.2

8.7

8.3

Services

5.1

5.6

5.7


Sectors Innitiatives :-

a.    Agriculture & Produce :-

  • RM1.3b subsidy for paddy price, seeds and fertilizers including cultivation of hill paddy
  • RM286m to increase the production of palm oil, rubber, cocoa and pepper
  • RM260m for Rainy Season Assistance of RM200/mth for three months to 440,000 rubber smallholders
  • RM250m for rubber production incentive for rubber smallholders
  • RM250m for monthly living allowance of RM200 to RM300 to 57,000 fishermen
  • RM140m to implement the Distribution of Necessary Goods Programme; open 4 MyFarmOutlets and upgrade 150 Agrobazaar Rakyat 1Malaysia
  • RM100m to improve the quality of palm oil products, replant oil palm and upgrade estate roads
  • RM100m for the Youth Agropreneur Development Programme to produce entrepreneurs involved in the production of high-value agricultural products
  • RM50m for scientific research to enhance the quality of palm oil products
  • RM30m to be provided by the Malaysian Palm Oil Board (MPOB) for the replanting of oil palm by smallholders
  • RM20m to upgrade roads in smallholders’ oil palm estates

b.   Education :-

  • RM7.4b allocated to 20 public universities 1) RM1.4b to four university hospitals 2) RM300m to five research universities 3) RM100m research fund for higher education institutions
  • RM4.3b to continue providing scholarships through the Public Service Department (RM1.6b), Majlis Amanah Rakyat (MARA), (RM2b), Ministry of Higher Education (RM250m), Ministry of Health (RM208m), Ministry of Education (RM194m), Ministry of Human Resources (RM28m) and Ministry of Youth and Sports (RM21m)
  • RM1.1b for hostel meal assistance programme
  • RM1.1b for additional payment assistance for school fees; textbook assistance and per capita grant assistance
  • RM600m special fund for improvement and maintenance of schools
  • RM570m to reconstruct 120 destitute schools as well as upgrade 1,800 science laboratories
  • RM478m to complete construction of 227 primary and secondary schools
  • RM340m to provide free tablets to assist teaching (by MCMC)
  • RM300m for the 1Malaysia Supplementary Food Programme for primary school students
  • RM300m to replace book vouchers with student debit cards to purchase books, stationery, computer devices and internet access

c.    Financial Services & Capital Market :-

Income tax and stamp duty exemption for International Currency Business Units (“ICBU”) which operate Islamic banking and takaful business activities transacted in foreign currencies to be extended to the year of assessment 2020                                      

  Insurance credit facilities with coverage valued up to RM1b by EXIM Bank to small medium enterprises (SMEs)                    

  RM3b to fund managers’ licences under the Securities Commission to invest in potential small and mid-cap companies           

  RM200m financing as well as insurance credit facilities with coverage value up to RM1b for SMEs from EXIM Bank                   

  RM165m for one-off increase in Private Retirement Scheme (PRS) incentive to RM1,000 for PRS contributors                           

  RM75m initial funding through the Capital Market Development Fund to establish a Capital Market Research Institute          

  Special step-up end-financing scheme for PR1MA houses, in collaboration with BNM, EPF and banks


d.    Information & Communication Technology (ICT) :-

More competitive and advanced broadband infrastructure : initially higher speed for the same price and within two years, double the speed with a 50% price reduction  

Increase ethernet broadband speeds in public universities to a maximum of 100 Gbps                                                                     

  Introduction of new location categories such as the Malaysian Digital Hub and the introduction of Digital Free Zones                         

  RM1b to widen the coverage as well as enhance the quality of broadband, to reach up to 20 Mbps throughout the nation        

  RM162m for the Malaysia Digital Economy Corporation (MDEC) to implement digital programmes e.g. e-commerce ecosystem and Digital Maker Movement



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